BHP Billiton acquires shale acreage

BHP Billiton has agreed to acquire all of Chesapeake Energy Corporation's interests in the Fayetteville Shale, USA, including the midstream pipeline system, for US$ 4.75 billion, which BHP Billiton expects to fund from the Group's cash resources.

Chesapeake's Fayetteville shale assets include approximately 487,000 acres of leasehold and producing natural gas properties located in Arkansas, USA. This is the second largest position in one of the largest gas fields in the world. This acquisition will increase BHP Billiton's net reserve and resource base by 45%.

These assets currently produce over 400 million ft³/d of gas and include development options that will support substantially higher production over a 40 year operating life. BHP Billiton and Chesapeake have also agreed a 12 month services agreement to ensure the safe transfer of operations to BHP Billiton.

Depending on regulatory approvals, BHP Billiton expects to close in the first half of 2011.

“This transaction marks BHP Billiton's entry into the US shale gas business. The operated position we are obtaining will immediately make BHP Billiton a major North American shale gas producer. It provides access to a competitive, long-life resource basin that benefits from our ability to invest through the economic cycles. Longer term, the expertise we gain here will be usable elsewhere as we continue to grow our business,” said J. Michael Yeager, Chief Executive of BHP Billiton Petroleum.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/22022011/bhp_billiton_acquires_shale_acreage/